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BBQ joint on Bay Shore closes after bankruptcy filing

A commercial bankruptcy has different financial implications than an individual bankruptcy. However, creditors in a business bankruptcy may still seek out personal assets when they back business debts. The following Chapter 11 bankruptcy illustrates how a business may be forced into bankruptcy, even when it has a large number of customers.

Smokin’ Al’s Famous BBQ Joint on Bay Shore, which is located on Long Island, has closed its doors after 10 years, according to court documents. The owner has opened another restaurant in Massapequa Park, which is 12 miles away from the old location.

Smokin’ Al’s has been under Chapter 11 bankruptcy since June 1, 2012. The bankruptcy filing shows that the company’s total debt was about $2 million at that time. Court documents also show that the company’s financial difficulties began when the owner opened the second restaurant.

The expense of opening the second location — in particular, the cost of installing an air-filtration system to reduce odors from the barbecue — was the primary cause of the company’s debt. The owner said that the Bay Shore location’s closure was not related to the bankruptcy filing and added that the restaurant had not changed the quality of its food since the bankruptcy.

A business owner who is considering a Chapter 11 bankruptcy should know that this process may allow the business to void prior contracts. This type of bankruptcy may also allow the business to reduce withholding taxes and past-due sales taxes to a manageable level.

Source: Newsday, “Bay Shore’s Smokin’ Al’s closes amid sewer, bankruptcy woes,” Joan Reminick and Keiko Morris, Feb. 25, 2013

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